"Closing the loopholes: Recommendations for an EU corporate sustainability law which works for rights holders"

[...] This briefing outlines Amnesty International’s key concerns for the CSDDD, detailing where the proposals from the European Commission and the Council fail to live up to international human rights standards and what these gaps could mean for the victims of corporate harm. The briefing also presents Amnesty’s key recommendations to address those gaps so that the CSDDD can be fit to provide access to justice for victims of corporate harm. Finally, the briefing summarizes pertinent findings from research conducted by Amnesty over the past 20 years to show what is at risk for victims should the EU not implement these recommendations and develop an effective CSDDD. [...]

6. Conclusion and Recommendations

Human rights and environmental due diligence is not intended to be a tick-box exercise. Rather it is intended to be an approach which brings human rights and environmental harm to the forefront of company operations. It should be a process by which we begin to change the status quo which currently sees companies putting profit above people and the planet, to one where tackling human rights and environmental impacts is central to the operations of businesses.

The operations and value chains of companies, including those operating in the EU, have devasting impacts on people around the world: from Indigenous peoples whose lands have been destroyed, to women workers denied access to formalized or permanent work, to the misuse of rubber bullets to target peaceful protestors. EU policymakers should keep these cases in mind while developing this legislation and remember the impact this legislation could have for communities and human rights defenders like Esther Kiobel around the world.

In order for the CSDDD to even begin to address these types of corporate human rights and environmental harm, it must be based on current international standards on business and human rights as the floor – the minimum standard. This briefing outlines several key areas where current proposals put forward by the European Commission and the Council fail to live up to these standards, including the scope of human rights companies must assess during their human rights and environmental due diligence, the parts of the value chain they must include in their assessments, and the access to justice measures the legislation will provide.

If the CSDDD is to meaningfully advance respect for human rights and environmental sustainability throughout the value chain, it must address these failures including by implementing the following recommendations.

Human Rights Scope

• Companies should be required to conduct human rights and environmental due diligence with respect to all human rights risks and impacts using a risk-based approach.
• A comprehensive, but non-exhaustive, list of international human rights instruments should be included in the annex of the CSDDD for reference only.

Climate and Environment

• All companies should be required to assess and address the risks of harmful impacts from their greenhouse gas emissions in their global value chains.
• Provisions to hold companies liable for their impacts on climate should they fail to conduct effective human rights and environmental due diligence should be included in the CSDDD.
• Companies should be required to assess and address environmental damage. Environmental damage should be defined using a broad, open-ended provision including all actual and potential impacts to the environment, including climate and biodiversity.

Value Chain Scope

• Companies should be required to conduct human rights and environmental due diligence in relation to their entire value chain using a risk-based approach.

Industry Schemes and Third-Party Audits

• Although businesses may utilise industry schemes and auditors if they wish, the CSDDD should clarify that businesses remain individually responsible for their human rights and environmental due diligence.

Company & Sector Scope

• The obligation to conduct human rights and environmental due diligence under the CSDDD should apply to all companies regardless of size or sector including financial institutions and companies whose products are subject to export control.

Stakeholder Engagement & Free, Prior and Informed Consent

• Companies should be required to meaningfully and safely engage with actually and potentially impacted rightsholders throughout the due diligence process.
• Companies should be required to respect the rights of Indigenous peoples including their right to be consulted in order to obtain their free, prior and informed consent.

Racial, Gender and Intersectional Justice

• Companies should be required to conduct due diligence in relation to all human rights and in relation to the full value chain using an intersectional perspective (including in relation to gender and racial justice).
• Member states should also be required to address the barriers to accessing justice faced by marginalised communities.

Access to Justice

• The CSDDD must include provisions stating that a business can be held liable for harm that they cause, or contribute to, as a result of their failure to carry out adequate human rights and environmental due diligence.
• The CSDDD should clarify that legal responsibility for human rights harm is assigned to controlling companies and where two or more enterprises are liable for the same damage, they should be liable, jointly and severally.
• If claimants can prima facie demonstrate that they have suffered harm, and that this is likely to have been the result of the company’s activities, the law should shift the burden of proof to the corporate defendant.
• Under the CSDDD member states should be address remove barriers to accessing justice such as
  • Addressing asymmetries in access to information
  • Ensuring that legal and procedural costs are not prohibitively expensive for claimants to seek remedy
  • Allowing claimants to seek injunctive measures
  • Ensuring complainants can utilise a choice of law
  • Ensuring that limitation periods applicable to the directive are no less than ten years and do not begin to run before the claimant knows or should reasonably have known that the defendant's conduct was causally relevant to their harm.